Highlights 2019

Index

Letter to our Shareholders 2

Our Company 6

Our Strategy 8

Stock market data 9

Market trends 10

A unique product offer 18

Main events and products launched in 2019 20

A year of consolidation 26

Datalogic Highlights 2019 1 DATALOGIC HIGHLIGHTS 2019

Dear Shareholders, in sharing the results achieved by our Group in 2019, These investments in R&D have led, in particular, to we would like to underline how the strategy imple- the development of an innovative line of Mobile Com- mented in previous years has enabled us to best meet puters for industrial use capable of supporting vari- the challenges of an increasingly complex global con- ous applications in different areas, which have had a text, which has been particularly tough for all opera- positive impact on results and which account for more tors in the sector. than half of the turnover generated by new products in 2019. Despite the fact that during the course of the year an international scenario of growing uncertainty and a Analysing the results by geographical area and sector, general crisis in the reference end-markets emerged, we must first of all stress how difficulties associated the Group’s growth in North America in all sectors with the automotive sector has impacted the results, in which it operates and the growing Vitality Index especially in EMEAI. Among the causes of these diffi- (20.1% compared to 15.0% in 2018) confirms the culties are US tariffs and the latest stringent Europe- Group’s strength. an regulation on emissions, which came into force in September 2018. Germany, one of the main European The Group closed 2019 with a drop in volumes in the countries in which the Datalogic Group operates, was EMEAI and APAC areas and, to a lesser extent, a drop particularly involved in the trade war initiated by the in margins, confirming its market positioning and United States, in relation to which, sanctions against ability to generate operating cash and increasing in- the automotive industry were added. vestments in research and development. Despite the general crisis in the automotive sector, The awareness of competing in an increasingly de- combined with a slowdown in the packaging industry, manding market, in which increasingly aggressive the company was able to contain the decline in the competitors operate, has led us in recent years to in- Manufacturing sector in the EMEAI area, limiting it to vest heavily and consistently in Research and Devel- 1.6%. opment, in order to provide the end customer with a unique and increasingly broad portfolio of high-tech On the other hand, the Transportation & Logistics sec- products. Over the last two years we have invested tor recorded an overall growth of 9.5%, with a very posi- heavily in human resources, significantly expanding tive performance in EMEAI and North America. Positive the R&D team, which reached almost 500 units in results also came from the Healthcare sector, driven by 2019, in the knowledge that our people’s talent is one sales not only in EMEAI, but also in North America. of our greatest strengths. Research and Development expenses in 2019 amounted to €64.7 million, reaching The Retail sector, which accounts for almost 47% of 10.6% on revenues, in line with the Group’s strategic Datalogic’s turnover, has on the other hand recorded objectives in terms of innovation. a slowdown in EMEAI, due to significant roll-outs of

2 Datalogic Highlights 2019 The Group will continue its growth strategy, focused on constant commitment to innovation and the development of new products, on maximising profitability, including through a careful cost control policy, and on maintaining financial and capital strength.

Datalogic Highlights 2018 3 DATALOGIC HIGHLIGHTS 2019

retail scanners in the previous two years. On the other sectors in which we operate – Retail, Transportation hand, Retail results in America and APAC are growing. & Logistics, Manufacturing and Healthcare – has allowed us to continue to present ourselves as the The decline in results in APAC is mainly due to difficul- only company capable of meeting customer needs ties in China in the Consumer Electronics and Manu- both in the automatic data capture (ADC) and indus- facturing segments. 2019 was a year of great difficulty trial automation (IA) markets, along the entire value for the Chinese economy, penalised and challenged by chain. the trade war with the United States along with a series of internal problems. The revision of our offer strategy envisages maintaining leadership in fixed retail scanners (FRS) and sta- In consolidating our production capacity in APAC and tionary industrial scanners (SIS), with investments ensuring greater flexibility and coverage in Asian mar- in the new generation of scanners for the Retail and kets, at the beginning of the year we celebrated 10 Manufacturing and Transportation & Logistics sec- years of having a presence in Vietnam – which to date tors. We also intend to gain new market shares in remains our most important production site – with a the handheld scanner market, especially in those ceremony attended by the main stakeholders and rep- geographical areas where we have less penetra- resentatives of local institutions. We also inaugurated tion such as APAC and North America, as well as a new sales office in Japan, accompanied by a new increasing our share in the mobile computers mar- website in Japanese for improved and direct commu- ket in which we have invested heavily and which has nication with our customers. considerable potential within all of the application sectors in which we operate. While the APAC area suffered a slowdown as a result of the double-digit decline in China, the North American The picture of uncertainty in the second half of 2019 market, the US market in particular, recorded growth is likely to continue into 2020. In fact, starting from of 6.6%, which affected all four reference sectors. The January, the global macroeconomic trend was aggra- solidity acquired over the years has allowed us to im- vated by the spread of Covid-19, which initially affect- prove our competitive positioning in one of our main ed China and then expanded to other countries in the reference markets, America, where, despite the pres- APAC area, until it reached Europe (Italy in particular) ence of much larger competitors, we have been able and the American continent. Such circumstances, the to exploit the competitive advantage represented by nature and extent of which are extraordinary, will in- the finest expertise placed at the service of innovation evitably create both direct and indirect repercussions and technological development. on global economic activity. The general climate of uncertainty in the markets is already evident, the Within this international framework, our ability to evolution and effects of which are not currently pre- offer innovative technologies to operators in the dictable.

4 Datalogic Highlights 2019 The impact of Covid-19 on Group results will depend on the extent to which the virus will spread within the markets in which the Group operates through the design, distribution and sale of its products and the macroeconomic effects that the virus will have in the affected countries. We are confident that the Group’s diversification into different markets and geographical areas, as well as its limited exposure to the Ital- ian market, will help mitigate the negative effects of Covid-19 in specific areas of the world.

Despite the current context of uncertainty, the Group will continue its growth strategy, focused on constant commitment to innovation and the development of new products, on maximising profitability, including through a careful cost control policy, and on maintaining financial and capital strength.

I am sure that Datalogic is ready to take up and overcome this challenge, thanks to the value of its people, the thousands of customers who place their trust in us for the development of their business, the partners, distributors, suppliers and all the employees around the world who allow the Group to grow and continue along the path of expansion and innovation every day. I would like to thank all those who support this journey and all the stakeholders and investors who make our success possible, just as our founder and Chairman envis- aged 48 years ago.

Valentina Volta Chief Executive Officer

Datalogic Highlights 2019 5 DATALOGIC HIGHLIGHTS 2019

Our Company

Vision Mission

A world identified, detected, inspected, marked and To provide Customers in Retail, Manufacturing, Trans- verified by Datalogic. portation & Logistics and Healthcare the best quality and efficiency in data collection and process automation, thanks to superior technology, innovative products, excellent solutions, and extremely talented people.

Datalogic operates at a global level in the sectors of code scanning systems used in supermarkets and retail automatic data capture and process automation. The outlets around the world are Datalogic’s. In the same Group, which boasts a record-breaking 48-year history, way, Datalogic products are used by major airports, cou- with cutting-edge technologies, today specialises in the riers and postal systems, major industries, and hospitals. design and production of bar code readers, mobile com- The Datalogic Group employs approximately 3,000 peo- puters, RFID devices, detection, measurement and safe- ple worldwide, spread over 28 countries, with production ty sensors, vision and laser marking systems. The Com- facilities and repair centres in Italy, the United States, pany is unique in the sector, in that it guarantees a wide Brazil, Slovakia, Hungary, Australia and Vietnam, and and specialised offer in the field of automatic data collec- 11 research centres located in Italy, Germany, the United tion and process automation along the entire value chain States, China and Vietnam, with a portfolio of over 1,200 of the main industrial sectors: Retail, Transportation & patents acquired and another 350 being acquired in var- Logistics, Manufacturing and Healthcare. Half of the bar ious jurisdictions.

NEW ACQUISITIONS ■ Minec AB ■ LAservall S.p.A. YEARS OF EXPANSION ■ Informatics Inc. NEW STRATEGY ■ Acquisition of Escort ■ PSC Inc. 2012 ■ Set up new One Datalogic 1972 Memory Systems 2001 ■ Datasensor S.p.A. ■ New organization by ■ Acquisition of IDWare ■ Evolution Robotic Retail Inc. 2015 Verticals mobile Computing & ■ Accu-Sort System Inc. ■ Acquisition of Soredi Communications ■ PPT Vision Inc. Touch Systems GMBH

FOUNDATION LISTING INNOVATION ■ Established ■ Listed on the ■ Asset Acquisition in Bologna 1998 STAR segment of 2002 from Multiware 2017 1997 the Italian Stock 2011 Photonics SA Exchange ■ Partnership with CAEN RFID S.r.l.

6 Datalogic Highlights 2019 International Footprint

10 11 2

Values FOCUSING ON RESULTS Deliver what you promise

OWNERSHIP REALISM Feel and act as an owner of Datalogic Face reality and fix what is wrong

EFFICIENCY NO SHORT CUTS Treat company expenses as you Don’t compromise on strategy, culture or would your own achieving results

Datalogic Highlights 2019 7 DATALOGIC HIGHLIGHTS 2019

Our Strategy

Objective Scope of work Advantage

To grow above the market To remain a product A wide range of products, average, while increasing Company, while focusing capable of meeting both profit margins. on integrated solutions automatic data collection to meet the needs of end and process automation customers in the Retail, needs by providing Transportation & Logistics, solutions along the Manufacturing and entire value chain of our Healthcare sectors. customers. Consolidate our market position in EMEA and become a strong player in the North American market. Increase our position in APAC, with a growing presence in China.

8 Datalogic Highlights 2019 Stock market data

Datalogic S.p.A. has been listed on the Borsa Italiana During 2019, the share reported a negative perfor- since 2001 - STAR segment of the MTA, Italy’s screen- mance of 17.3%. The share reached a maximum value based stock market, which comprises medium-sized of €24.95 per share on 25 January 2019 and a mini- companies with market capitalisations of between mum value of €12.04 on 28 August 2019. The average €40 million and €1 billion, committed to meeting daily volumes exchanged in 2019 were approximately standards of excellence. 105,000 shares, up from an average of 83,000 in the previous year.

STOCK MARKET DATA 2019

SEGMENT STAR - MTA FREE-FLOAT HYDRA S.P.A. BLOOMBERG CODE DAL.IM 33.2% 64.8% REUTERS CODE DAL.MI TREASURY NUMBER OF SHARES 58,446,491 (including n. 1,148,337 treasury shares) SHARES 2019 MAX 24.95 EUROS (at 25th January 2019) 2.0% 2019 MIN 12.04 EUROS (at 28th August 2019)

CAPITALIZATION 985.99 MIL EUROS at 31st December 2019

ANNUAL TREND: DATALOGIC SHARE PERFORMANCE/VOLUMES

26,0 25,0 1820 24,0 1690

23,0 1560 Thousand 22,0 1430 21,0 1300 20,0 1170 19,0 1040 18,0 910 Prices

17,0 Volumes 780 16,0 650 15,0 520 14,0 13,0 390 12,0 260 11,0 130 10,0 0 Jan 19 Feb 19 Mar 19 Apr 19 May 19 Jun 19 Jul 19 Aug 19 Sept 19 Oct 19 Nov 19 Dec 19 Jan 20 DATALOGIC HIGHLIGHTS 2019

Market trends Retail

Datalogic is the only automatic data capture manu- tions. After the significant roll-outs in the two previous facturer able to offer solutions that cover the entire years at the main European retailers, a slowdown is to Retail sector, from distribution centres, to outlets of all be considered as normal. Improving results should be sizes, to home delivery, along the entire value chain. highlighted in North America, Latin America and Asia Although the Retail sector was down 4.4% in 2019 Pacific, confirming the potential of these large markets. compared to the previous year, the Group consolidat- Datalogic has been a leader in the Retail market since ed its global leadership in the retail scanner segment. 1974, when one of our retail scanners scanned the The slowdown is mainly related to a decline in the sector world’s first bar code placed on a consumer good in an in EMEAI, attributable to the typical cyclicality of fixed Ohio supermarket. Today we are the absolute lead- retail scanner implementations for check-out applica- er in the fixed retail scanner market with a 38.8% market share, of which 3.5% has been achieved in the last two years (Source VDC). Our leadership is complemented by a significant share in handheld scanners and stationary industrial scanners for automation applications in distribution centres. Finally, our new Mobile Computer offering, and in particular the new Android PDAs, represents the most important growth potential for Datalogic in the Retail sector. Our estimate of the Total Available Market for Datalogic in this industry is in excess of €3 billion globally, with the USA and EMEA representing the most important regions, along with China, which is on the verge of global leadership thanks to a very high growth rate (Source: Osserva- torio eCommerce B2c of the Politecnico di Milano). At the heart of international retailers’ strategies are technologies and solutions that allow them to manage the increasingly blurred boundary between physical and virtual commerce. More and more advanced omni-channel models have been identified, on the one hand the explosion of e-commerce, to which all the big “brick and mortar” retailers We meet the needs of retailers are now dedicated, and on the other the large invest- globally, from the distribution ments in traditional retail outlets to ensure that shop- centres, through check-out, ping becomes an ever more engaging and content-rich to the customer’s home. customer experience, capable of transcending beyond the simple economic transaction. Brands need scenic

10 Datalogic Highlights 2019 and multi-sensory locations: those who have given up ble companion for all those who work in the Retail buying online, which is simple, quick and possible in environment: inventory, price control, assisted sell- just a few clicks, in return expect a real, meaningful and ing, are just some of the applications that make the personalised shopping experience. The main interna- Memor™10 top-of-the-range. tional players, in addition to providing themselves with 2019 also saw the introduction to the market of the advanced logistics solutions, which allow for a stream- new Magellan 1500i presentation scanner, one of the lined and extensive warehouse management, are exper- best solutions available on the market for cash point imenting with new products and solutions that enable applications especially for small and medium surfac- new services such as: click&collect, drive&collect, ones and non-food environments. The Magellan 1500i is line verification, in real time, of the availability and exact a product that thanks to its small size, great flexibility as position within the shelves of the products in the store regards installation and excellent scanning performance, or in the warehouse, assisted selling, self scanning and allows for maximum versatility of use even when the self check-out, the intelligent trolley (connected to the available space at the cash point is extremely reduced. IA), the interactive window and smart dressing rooms. In addition to traditional linear and matrix codes, the Thanks to its wide range of products and solutions, Magellan 1500i can read Digimarc® codes. Datalogic Datalogic is able to satisfy all retail needs, from the was the first manufacturer of identification systems most traditional to the newest trends, acting as a key able to support this technology, which in practice al- player along the entire value chain. Our product portfo- lows bar codes to be generated on the entire product lio includes products and solutions for both the food and package, but invisible to the human eye, drastically non-food sectors: retail scanners (from the most compact simplifying and accelerating the reading phase and also presentation scanners to bi-optic scanners), wired and guaranteeing authenticity and product traceability. wireless handheld scanners, mobile computers for store The next step for Datalogic will be the development automation, inventories and outdoor mobility applications, of more and more “frictionless” check-out devices, in stationary industrial scanners for distribution centre au- other words, making checkout transactions faster and tomation, and more vertical solutions such as self-shop- smoother, thanks to the development of Vision and ping, loss prevention and those based on RFID technology. Machine Learning technologies. In 2019 Datalogic launched the Memor™10 PDA, In fact, Datalogic intends to continue to meet all the chal- equipped with Wireless Charging technology and lenges faced by retail, to protect and increase its leadership the Android™ 8.1 (Oreo) operating system, a relia- and be ready to embrace new developments in the sector.

Distribution Center | Warehouse Store Management | Check-out POS DATALOGIC HIGHLIGHTS 2019

Market trends Manufacturing

Since the summer months of last year, global growth in the allowed us to become the reference point for traceability in manufacturing industry has slowed, penalised by the pro- the industrial sector. With the different applications of Facto- gressive deterioration of the national and international op- ry Automation, Datalogic adds to its leadership in stationary erating environment. The slowdown phase is common for scanners one of the most comprehensive offerings on the all the major European players, and is largely linked to the market ranging from sensors to safety systems, from laser difficulties in the automotive sector, following the entry into marking to vision systems. Finally, the range of industrial force of new regulations on the approval of vehicles, which handheld guns and Mobile Computers, focused in particular has generated tensions in the plants. on intra-logistics solutions, should be noted. In China, for the first time after a long period of sustained The development of Industry 4.0 remains key to the new ap- development, we have witnessed a slowdown in the growth plication needs that see Datalogic in first place thanks to the rate of important sectors for us, such as consumer elec- completeness of its product range. There is a strong growth tronics, where the sector driven by smart phones seems to in all traceability applications, with increasing demands for have reached maturity, although there is hope that new 5G technology may be the key to trigger another period of significant growth. As regards the Chinese domestic market, although GDP growth in 2019 was 6.1%, signs of a gradual slowdown have begun to emerge. The manufacturing industry is still the key sector for the country and the “Made in China 2025” ten-year plan, formulated on the “Industry 4.0” German model, was intended to favour the manufacturing sector, spreading the use of Information Technology, Internet of Things and Big Data, but the trends in electronics, which at the beginning of 2020 were affected by the consequences of the Covid-19 epidemic, will heavily influence the Chinese economy. As a result, Datalogic’s Manufacturing division suffered a 7.4% decrease in 2019 compared to last year. The slowdown in the automotive market in EMEA and in the consumer electronics sector in China was partially offset by the double-digit growth in the North American market. Datalogic offers a multi-product portfolio capable of serving all major manufacturing sectors, with a focus on automotive, Unique provider of a portfolio of electronics, packaging and intra-logistics. Datalogic’s strate- intelligent, interconnected devices gic objective is first of all to continue investing in the field that can track, protect, identify, of stationary industrial scanners (SIS), a sector that con- detect, control and mark. tinues to grow at rates close to 5% and in which we are market leader with a market share of over 22%, which has

12 Datalogic Highlights 2019 DPM (Direct Part Marking) code scanning and the entire ro- 2019 also saw the launch of the new S5N, standard M18 botics sector: robots, cobots (collaborative robots) and AGV tubular sensors, designed to become the new industry (Automated Guided Vehicles). benchmark in terms of sensors with IO-Link connectivity for Datalogic’s core business remains automatic data collec- Industry 4.0 applications. Thanks to the new ASIC circuit tion, which in turn is the basis of Industry 4.0’s Business developed by Datalogic, the sensors in this family are the Analytics line of development. Today only 1% of the data first tubular sensors available on the market with IO-Link collected is used by companies, who could benefit enor- V1.1 Smart Sensor profile. mously from machine learning technologies. Factory 4.0 For Direct Part Marking solutions, where identification codes envisages fully interconnected machines, which communi- are engraved directly on the part to be tracked, without the cate with each other and carry out self-diagnostics and pre- use of labels, Datalogic is a leader in fibre laser marking ventive maintenance. technologies, increasingly used in various sectors such In 2019 important new models of the Matrix 220 were as automotive, electronics, food and pharmaceutical. launched, the most compact industrial bar code scanner Thanks to its high performance laser marking and scanning with imager technology that can also read Digimarc® solutions, combined with the latest software developments, codes, which, thanks to its excellent performance and very Datalogic is able to implement complete marking and veri- compact size, is an ideal product for traceability and auto- fication solutions directly on the production line. mated warehouse applications. The industrial robotics market is estimated by the Interna- Also last year, the new Matrix 300N™, with 2 Mega Pixel tional Federation of Robotics (IFR) to be worth $13.9 billion. sensor, was introduced, the image-based industrial scan- Today a new generation of robots, called collaborative robots ner ideal for traceability in Automation, Electronics, Packag- (cobots), is being developed, which can interact with humans, ing and also for intra-logistics solutions. both in factories and in everyday life and which will consti- For the latter application area, in 2019, Datalogic also tute a real revolution not only from a technological point of launched the new scanner models, PowerScan™ PD9531 view, but also from the point of view of social organisation. Auto Range (AR) and the Falcon™ X4 Auto Range mobile In 2019 Datalogic launched the new version of its IMPACT computer. Both already leaders in their category, now with software, a proven platform that allows users to develop greater performance levels thanks to the Near/Far 1D/2D robot guidance applications using artificial vision solu- imager technology with Auto Range functionality, which al- tions. IMPACT has been developed for full compatibility with lows for bar codes to be scanned at different distances, from “Universal Robots”, the leading Danish manufacturer of col- a few centimetres up to 20 meters. laborative industrial robots.

Automotive | Electronics | Packaging | Intralogistics DATALOGIC HIGHLIGHTS 2019

Market trends

Transportation & Logistics

The Transportation & Logistics sector reported lan Linate. The growth potential of the baggage han- strong growth of 9.5% on 2018, driven by a very pos- dling sector is still huge: it is expected to reach $9.4 itive performance in North America and EMEAI, re- billion by 2020, with an average growth rate of 8% from gions where Datalogic has partnered with all major 2015 to 2020 (Source: IATA). In 2019 Datalogic closed express couriers and carriers for years. an important contract with one of Europe’s leading In general, the growth of the Transportation & Logis- airport hubs, which chose our company to comply tics sector is driven by the considerable development with the new requirements of IATA Resolution 753, of e-commerce, which requires logistics organisations the international air traffic control body, which from of all the companies involved to be able to sort at high 2018 required airlines to fully trace baggage from col- speed, manage parcels of any size, with high flexibility lection to return to the passenger. Baggage handling and efficiency in order and warehouse management, as irregularities continued to cost the industry $2.3 billion well as tracking of direct delivery to customers’ homes. in 2018, which Datalogic is actively helping to reduce. To meet the needs of these applications, some of the most advanced automatic identification technology solutions are required. In this context, Datalogic is We guarantee the most efficient and a fundamental partner, thanks to a range of prod- effective data collection for postal ucts and solutions among the most complete and services, express couriers, airports best-performing on the market and to the develop- and for all logistics applications, from ment of SW decoder libraries able to recognise a bar warehouse management to sorting code in real time, as well as other symbols and texts, systems. useful in cases where the bar code has deteriorated or is even absent. To further enhance our offering of high performance imager scanners, the AV500™ was launched in 2019. This is an innovative industrial 2D imaging-based scanner developed for high-speed applications in e-commerce, mail/parcel sorting and airport baggage handling, with the ability to be used on conveyors of all sizes and with an image capture capability of up to 32 frames per second. Datalogic has been at the forefront of the development of airport systems since 1984, when it installed the first automatic scanning station for baggage handling in Mi-

14 Datalogic Highlights 2019 The consolidation trend in the third-party logistics sec- guns and mobile computers) and, increasingly, when tor (3PL) also continues. Amazon’s announcement of it is managed automatically (scanners and stationary 24 hour delivery capabilities has opened up new growth position industrial cameras). opportunities for the entire 3PL market and generated In 2019, Datalogic launched the new Taskbook, a ro- demand for technology to meet new customer service bust tablet specifically designed for industrial applica- expectations. Only those capable of adapting quickly to tions, with an ergonomic design and balanced weight change and who invest in the most advanced technolo- even when held in one hand. The high degree of protec- gies will remain on the market. tion, robust casing, 1.6 millimetres thick glass (4 times In the first part of 2019, Datalogic launched the An- thicker than consumer products!) and resistance to re- droid version of the new Rhino II on the market, the peated falls on concrete from up to 1.2 metres, make it powerful and robust forklift computer that, integrat- the ideal device for extreme environments in logistics, ed with the latest auto range versions of the Power- maintenance, quality control and inspection applications. Scan™ industrial gun, represents the most complete The opportunities of the 4.0 revolution in industrial au- and high-performance solution for the management tomation are also reflected in the logistics sector: op- of warehouse applications, particularly in larger areas erators are called upon not only to act as managers of (distribution centres). physical flows, but also as guarantors of the quality of The boom in e-commerce and the ease with which cus- information flows along the supply chain. tomers can return unwanted products has led to new During 2019, Datalogic carried out an awareness cam- demands for the management of so-called reverse paign throughout Europe, in order to propose itself as logistics, to manage the re-storage of returned prod- a provider of the right technological solution for all par- ucts. This new application sector also represents a very ties involved in the 2014/40/EU Directive (distributors, interesting track and trace opportunity for Datalogic, wholesalers, retailers, merchandisers or logistics ser- both when the activity is managed manually (industrial vice providers).

Courier & Parcel | Logistics | Postal | Airports DATALOGIC HIGHLIGHTS 2019

Market trends

Healthcare

The Group’s Healthcare sector recorded a flat result significant losses for the entire pharmaceutical industry compared to 2018, driven by sales in North America sector. and EMEAI, but held back by the slowdown in APAC. Datalogic products are widely used in bed-side patient care Sales through the distribution channel are growing, es- applications. Thanks to our handheld and mobile computer pecially to American customers, often part of large pri- scanners dedicated to the Healthcare sector, it is possible vate hospital groups. to guarantee maximum precision in the management of The Healthcare sector for Datalogic has a value of $23.8 the administration of medicines to patients and in the con- million, of which it holds an estimated 4.6%. In general, trol of treatments, allowing for the respect of the 5 funda- investment in healthcare is growing rapidly throughout mental rights of the patient (administration to the correct the world, both due to the progressive ageing of the patient, of the correct medicine, in the correct dose, through population and the sharp increase in the need for trace- the correct means and at the correct time). ability of medicines, aimed on the one hand at increas- Another important application is that of tracing blood ingly guaranteeing patient safety and on the other at bags for transfusions, where even today there are still reducing the market for fake medicines, which lead to errors that have irreparable consequences, completely avoidable thanks to our technologies. The use of small stationary scanners with high performance scanning capabilities is essential for the auto- We value the entire healthcare mation of laboratory tests, combined with the use of ecosystem from drug production to handheld scanners for patient reconciliation. patient care. Finally, not to be forgotten is the management of stock and inventory for all hospital assets, which today is still a source of enormous redundancy and can be fully automated with the use of handheld scanners and mobile computers. The distribution chain of drugs and other healthcare products is typically managed through a dedicated supply chain, due to the special cleaning and control needs required for these devices. Also for this reason the specific characteristics of Datalogic products dedicated to Healthcare are essential, of particular importance is a high resistance to all of the most aggressive detergents used in hospitals, through equipping products with antimicrobial plastic, as explained in more details later on. The markets for telemedicine and mobile technology, are booming. The IoT is also a fertile ground for the devel-

16 Datalogic Highlights 2019 opment of new technologies, the application of Artificial All these developments lead to new interesting opportu- Intelligence and the use of blockchain. According to a re- nities for traceability and data collection applications and cent study conducted by MarketResearch.com, by 2020, therefore for Datalogic, which is able to offer the health- 40% of IoT technologies will be found in the Healthcare care market products with specific features such as: sector, approaching a total market value of approximate- antimicrobial plastics, inductive technology for wireless ly $117 billion. Healthcare is evolving from a traditional battery charging, patented bar code scanning verification model, in which treatment only takes place in hospital to ensure correct identification between patient and drug. centres, to a new model, in which treatment is accessible Many of our product models are equipped with plastics from everywhere. And all thanks to technology. that can withstand the most aggressive detergents used Even the world of “Big Pharma” is evolving towards the in particular in the hospital sector, but the incorporation so-called “Beyond The Pill” approach, i.e. continuing to of silver ions into the plastic of our Gryphon™ and Rida™ care for the patient after the purchase of the drug. casings provides additional antimicrobial protection, com- Finally, account should be taken of opportunities de- pliant with ISO022196/JISZ 2801 and therefore provides rived from the European Directive 2011/62/EU, the “An- an additional line of defence against the spread of hospital ti-Counterfeiting Directive” (FMD - Falsified Medicines infections. Being able to have products made with plastics Directive), issued in order to stem and prevent the phe- capable of inhibiting the development of the bacterial load nomenon of falsification of medicines, in force since 9 is particularly important in current times when we are ex- February 2019 in all Member States. Wholesalers and periencing the effects of the Coronavirus pandemic. other parties involved in the European distribution chain It should be noted that the “Healthcare” version of must now analyse the data matrix on the outer pack- the Memor™ 10 – the Datalogic portable computing of each individual medicine package to verify its au- er launched on the international market in January thenticity along the entire journey from production to 2019 – is also equipped with special disinfectant-ready administration to the patient. Similar legislation is also plastics, capable of withstanding the harshest daily coming into force in the USA with the Drug Supply Chain cleaning with solvents and chemicals. The back of the Security Act (DSCSA), which aims to trace the steps for handheld device is smooth, making it easy to clean and manufacturers, packagers, wholesale distributors and preventing the accumulation of the bacterial load. The strap third-party logistics service providers (business part- is also made of sanitary material and is completely wash- ners) to build an electronic traceability system for phar- able. Finally, the absence of contacts makes Memor™10 maceutical products by 2023. the ideal product for hospital bed-side activities.

Pharmacy | Hospital - Labs | Pharmaceutical DATALOGIC HIGHLIGHTS 2019

A unique product offer A large range of products able to satisfy all our 4 Verticals customers’ needs along their value chain

The most complete offer of bar code readers: from FRS for Retail to industrial scanners, from hand held scanners to mobile computers…

18 Datalogic Highlights 2019 … integrated by a wide range of products for industrial automation

Datalogic Highlights 2019 19 DATALOGIC HIGHLIGHTS 2019

Main events and products launched in 2019

2019 was an eventful year, which saw the launch of 13 quality of our products, which are destined to propel the new products on the market: more than one per month. In major multinationals that drive the global economy and to addition to introducing new, highly innovative products and optimise the level of our customer support services. solutions, such as the new generation of mobile computers in the Memor™ family – among the first to be included in Google™’s “Android Enterprise Recommended” programme JANUARY – the Company has continued its business policy across all Datalogic launches “a new era” in the retail world, preview- geographic areas, acquiring excellent contracts with some ing a wide range of products and solutions at the NRF, the of the leading companies, part of the Fortune 500, in the in- most important event for the Retail sector, which takes dustries in which we operate. Fortune 500 is an annual list place every year in New York City. In particular, Datalogic compiled and published by Fortune magazine that ranks the presented the first industrial portable devices (computers 500 largest U.S. corporations, measured by their revenue. and scanners) with wireless charging capability, Qi compat- ible, with a capacity to offer greater product reliability. These include the contract for a major supply of fixed retail scanners (FRS), signed with the largest supermarket com- The new Gryphon™ 4500 series is announced, the first pany in the United States in terms of turnover. This chain is handheld scanners to use a wireless charging system. Da- now ranked second by extension in the general ranking of talogic is the first industrial manufacturer to implement large retailers in the United States. Wireless Charging technology on devices, which eliminates the need to perform routine maintenance and cleaning Another significant contract for a major supply of handheld scanners (HHS) has been concluded with a well-known American retail company specialising in household DIY. This JANUARY company operates a chain of retail stores in both the United States and Canada.

The third contract that we would like to mention concerns the provision of multiple services for logistics, concluded with one of the best known American transport companies, specialising in express mail and parcel shipments, land transport, air transport and logistics services.

Trust and recognition from customers of this importance fills us with pride and drives us to constantly improve the GRYPHON™ 4500

20 Datalogic Highlights 2019 procedures for the charging system, significantly reducing of the top mobile products in the Datalogic 2019 range, suit- downtime and optimising investments. The new Gryphon™ able for the most diverse sectors: Retail (in-store activities, 4500, thanks to its ergonomic and elegant design, is par- assisted sales and operations management); Healthcare, ticularly suitable for non-food retail outlets, such as shops equipped with special disinfectant-ready plastics (bedside and access points (theatres, cinemas, concerts), but also medical assistance, pharmacy and analysis laboratories); for the management of cashiers in supermarkets. The Transportation & Logistics (proof of delivery for couriers GD4500 imager is also available in a Healthcare version, and use on 3PL lorries); Manufacturing (production line and with special disinfectable and antimicrobial plastics for quality control). bed-side healthcare applications.

Memor™ 1 is launched, the new full-touch device, ideal FEBRUARY for all types of automatic data collection applications, par- Datalogic celebrates 10 years of having a presence in ticularly in the Retail sector: from in-store assisted sales to Vietnam, in Ho Chi Minh City. The commemorative ceremo- the production line, from back-end reception to warehouse ny was attended by more than 1,000 people, among them distribution. Memor™1 is equipped with the Android™ 8.1 was the welcome presence of dignitaries and representa- operating system and the innovative Wireless Charging sys- tives of universities and local institutions and the Italian Am- tem. Also usable as a cordless phone, it is the ideal work bassador to Vietnam. An opportunity to retrace the exciting companion for those who work in retail environments such phases of the plant’s development project, starting from an as inventory, access control, collection points, assisted sell- opening with only 4 employees in January 2009, to becom- ing. In the manufacturing sector it is used for quality control, ing the Group’s first production site where approximately inventory, shipment/receipt. Finally, it is also particularly 55% of total production takes place, with over 800 people appreciated in logistics applications such as inventory, pick- employed. On the same day the inauguration ceremony of up/packing, shipment/receipt, tracking and tracing. the new canteen took place, a completely new 3-storey building, including a recreation area and equipped with an Memor™ 10 is launched, this is one of the very first rug- internal kitchen for both lunches and dinners. ged mobile computers to be included in the “Android Enter- prise Recommended” programme, the initiative launched by Google™ that helps companies choose the right Android MARCH devices and services for their businesses. Memor™10, also Datalogic announces the SLS-M5 (Master) and SLS-R5 equipped with Wireless Charging System, combines the du- (Slave), two new models of safety laser scanners from the rability and performance of a traditional robust business de- Laser Sentinel family, the range of innovative solutions for vice with the style of a user-friendly smartphone. This is one safety zone monitoring and protection of gate access to

MARCH

MEMOR™ 1 MEMOR™ 10 LASER SENTINEL

Datalogic Highlights 2019 21 DATALOGIC HIGHLIGHTS 2019

hazardous areas, covering a wide variety of applications in Datalogic also takes part in the European project Horizon industrial and intra-logistics environments. Following the 2020 NOLOSS (Lossless Photon management - Optical launch of the SLS-SA5 stand-alone model in 2018, Data- design for manufacture at different length scales), funded logic now offers an even more comprehensive solution for under the “Research & Innovation Marie Skłodowska-Curie single and multiple safety area monitoring applications. Action” tender. The objective of NOLOSS is to create an op- Laser Sentinel is able to manage both horizontal and verti- tical acquisition system without photon loss and to extract cal static applications (robotised cells, perimeter protection more and more in-depth information from images. Data- of machine tools and machining centres, protection of gate logic is one of the companies participating in the research access) and to manage dynamic applications (automatic consortium, consisting of 8 companies and 5 Universities/ guided forklifts and pallet trucks). Research Centres, belonging to 5 different European countries.

APRIL Datalogic, announces Matrix 220™, the most compact im- The 2nd General Assembly for the European project age-based bar code scanner on the market. Its innovative Horizon 2020 “ROSSINI” (RObot enhanced SenSing, image processing platform makes Matrix 220™ ideal for INtelligence and actuation to Improve job quality in electronic, automotive, packing and document manage- manufacturing) is held in Ostfildern, Germany. Data- ment applications and the best solution for high-speed and logic is lead partner and coordinator of the consortium Direct Part Marking applications. It is used in the following formed for the project, composed of 6 companies and 7 sectors: electronics and automotive (traceability of compo- Universities/Research Centres, belonging to 7 different nents during assembly and quality control), pharmaceu- European countries. The aim of the ROSSINI project is tical (analysis laboratory, quality control), food&beverage to develop a hardware-software platform in the produc- (traceability in production, packaging, distribution), OEM tion field, which will enable the creation of applications (machines for biomedical analysis, access control systems, in which robots and human operators collaborate (HRC) labelling machines). in total safety, improving work quality, production flexibility, efficiency and productivity. Combining the different Datalogic exhibits products and services at ProMat, the main innovative technologies developed by major industrial “Manufacturing” and “Material Handling” exhibition that took stakeholders, the ROSSINI platform will allow for the place in Chicago, at McCormick Place, from 8 to 11 April. development of a range of robotic arms, “Collaborative At this event Datalogic presented new products and inno- by Birth”, with new integrated safety features and pre- vative solutions to improve warehouse efficiency and the dictive algorithms. latest technologies for robotics and production automation.

APRIL

MATRIX 220™ TASKBOOK

22 Datalogic Highlights 2019 Datalogic also announces TaskBook, the new industrial Datalogic opens a new sales office in Tokyo, Japan, to get tablet suitable for a wide range of warehouse operations. closer to its local partners and customers and guarantee TaskBook is a robust, yet easy-to-use mobile device whose them a direct and continuous presence. The Japanese mar- tablet format introduces a new way of working in facto- ket has always been of great interest to our company, which ries and warehouses. Particularly suitable for small or has had business relations with Japan since 1978. For the non-electrically driven forklifts, it can also be installed on time being, 6 staff and 2 consultants are employed in the pallet trucks. Its robustness makes it ideal in most extreme new premises. Japan is once again a particularly promising environments in logistics, maintenance, quality control and market for our business and Datalogic is pleased to renew inspection applications. its trust and friendship with this country.

MAY JUNE Datalogic announces the release of the Magellan™ 1500i, Datalogic participates in the first edition of the exhibi- the high-performance retail presentation scanner. Useful in tion-conference “Smart Vision Forum: le tecnologie per various application environments, Magellan™ 1500i is to- l’industria del futuro”, the event organised by Messe Frank- day one of the best and most compact solutions available furt Italia and promoted by ANIE Automazione and AIdAM, on the market to meet the needs of cashier applications, es- which was held at the Palazzo dei Congressi in Bologna. pecially in non-food environments (retail, pharmacies, ser- Smart Vision Forum combines the exhibition space with an vice companies). The Magellan 1500i can be placed on the important conference schedule, with presentations on Ar- cashier counter, or used as a handheld scanner in the case tificial Vision technologies by scholars and exhibiting com- of objects that are too heavy to be placed on the counter. panies.

Datalogic is the protagonist of the SPS IPC Drives event, the most important Italian event in the area of industrial au- JULY tomation, which takes place every year at Fiere di Parma. Datalogic launches the new MX-E90 industrial vision pro- Datalogic showcases the latest high-tech innovations and cessor, which offers excellent performance for all types solutions designed to ensure traceability in production: ro- of machine vision applications in various markets: au- botic guidance, rapid warehouse management processes, tomotive, electronics, packaging and food&beverage. In control and security systems, laser scanner technologies, particular, it allows for the performance of rapid checks imagers, linear cameras, handheld devices for automatic and processing of high resolution images in the following data collection on the move. inspection applications: syringe needle inspection (phar-

MAY JULY

MAGELLAN™ 1500i MX-E90

Datalogic Highlights 2019 23 DATALOGIC HIGHLIGHTS 2019

maceutical industry); checking the correct positioning of ufacturing companies (for traceability, sorting, freight for- the cap on the bottle, reading labels and bar codes on food warding, warehouse management) to those working in packaging (food and packaging industry), integrated elec- the health sector (for inventory activities). tronic components alignment (electronics industry). With a view to an ever closer collaboration between uni- versity and businesses, Datalogic is funding five two-year With the introduction in the market of the new Matrix scholarships, worth €3,000, for the best Bachelor degree 300N™ 2MP, Datalogic expands its range of bar code scan- graduates in Information Engineering at universities out- ning products based on imager technology designed for in- side the Emilia-Romagna Region, who decide to enrol in dustrial environments such as automotive and electronics, Master’s degree courses in Computer and Automation intra-logistics and packing lines, packaging, document pro- Engineering or Electronic Engineering for ICT at the Uni- cessing and the medical sector. Matrix 300N™ 2MP allows versità di Ferrara. for fast and accurate scanning of any type of code on any material or surface printed or marked, from glossy metal to low contrast printing. SEPTEMBER Datalogic participates in PACK EXPO 2019, the most important logistics event in the industry, which took place AUGUST from 23 to 25 September 2019 at the Las Vegas Conven- Datalogic announces the new PowerScan™ PD9531 tion Center. The Company exhibited the technological in- and Falcon™ X4 models, with even higher performance novations that drive the market including: vision and OCR thanks to the “Auto Range” feature, which allows bar tools; bar code scanning solutions; sensors and safety codes to be read at different distances, with a scanning ca- components for machinery; robots and work cells; laser pacity ranging from 15 centimetres to 20 metres, in almost marking solutions that can be implemented in hours in- all lighting conditions. These new products allow opera- stead of days. tors to easily move from scanning a close-up bar code on a pallet to one placed on top of a warehouse rack, max- Datalogic is the sole beneficiary of regional funding for imising the efficiency of operations. PowerScan™ PD9531 the Flute project (FLexibility, Usability, easy installation AR and Falcon™ X4 are suitable for any application field: and configuration faciliTy, Eco-sustainability). Flute will from retail (for back office/warehouse, point of sale and allow for the development of innovative devices for arti- stock management, and inventory activities); to transport ficial vision and laser marking, aimed at flexibility, usa- and logistics companies (for storage, shipment/receipt, bility, ease of installation and configuration and eco-sus- picking, packing and cycle counting activities), from man- tainability. The innovations introduced will aim to make

AUGUST

MATRIX 300N™ 2MP POWERSCAN FALCON™ X4

24 Datalogic Highlights 2019 these technologies usable also for SMEs that, due to one of the most influential organisations for the retail their size and lack of skills, have greater difficulty in -ex industry in China. The exhibition, held at Qingdao World ploiting the advantages of artificial vision systems and in Expo City, brought together all international and local the world of packaging, where innovative laser marking market leaders as well as experts from universities and technologies will partially replace the printing solutions institutions. currently used. At SPS Nuremberg Datalogic presents the new line of intelligent sensors and a complete portfolio of products for identification and traceability in an industrial environment. OCTOBER Visitors to Europe’s most important industrial automation Datalogic announces the release of IMPACT software ver- trade fair had the opportunity to see live integrated work- sion 12.2, for the management of all types of vision and in- ing solutions of safety sensors and scanners, artificial vision spection applications. The new IMPACT version enables any systems for production control, laser markers and bar code smart camera or industrial vision processor to be integrated scanners for identification. with the collaborative robots of the Danish company “Uni- versal Robots”. In addition to the robot-guide functionality, Datalogic has also made improvements to the object posi- DECEMBER tion location and tracking tools. Datalogic presents the AV500™, an innovative industrial bar code scanner based on 2D imaging technology devel- With company mobility management, Datalogic continues oped for package sorting applications. Sorting objects of to embrace Android Enterprise by supporting OEMConfig, different sizes, even irregular ones, quickly and safely is a new Android™ standard that has enabled Original Equip- one of the challenges that express couriers, e-commerce ment Manufacturers (OEMs) to create custom device fea- companies and airports have to face today. This new indus- tures and controls offered by mobile device management trial imager offers solutions for all high speed applications providers. Being distributed via Google Play™, customers in e-commerce, mail/parcel sorting and airport baggage always have the latest configuration options for Datalogic handling, thanks to its potential to be used on conveyors portable computers. of all sizes, as well as in static reading applications. Since codes are scanned several times under the scanning array, excellent scanning performance can be achieved even on NOVEMBER plastic-covered or damaged codes. This translates into an Datalogic participates in CHINASHOP 2019, the event effective 50% increase in production volume compared to organised by China Chain Store & Franchise Association, other traditional solutions.

SEPTEMBER DECEMBER

PACK EXPO 2019 AV500™

Datalogic Highlights 2019 25 DATALOGIC HIGHLIGHTS 2019

A year of consolidation

2019 REVENUES Total 612.5 MLN EUROS

Revenues by division Revenues by geographic area

92.8% 50.5% Datalogic EMEAI

35.8% 4.7% North America Solution Net System 2.6% Latin America 3.1%

Informatics 11.0% APAC

REVENUES (MLN EUROS) R&D (MLN EUROS)*

700 60

600 50

500 40 631.0 400 612.5 606.0 64.7 10.6% 63.4 10.0% 576.5 30 535.1 300 55.3 9.1%

20 50.4 8.7%

200 48.2 9.0%

100 10

0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018** 2019**

* % on revenues ** including R&D Capex effects

26 Datalogic Highlights 2019 2019 EMPLOEEYS Total 3,074

Employees by geographic area Employees by functional area 43.5% Operations

56.7% 22.1% EMEAI Mktg & Sales 20.4% 19.7% R&D Americas 7.7% G&A 23.6% 6.3% APAC CAS

2019 EMPLOYEES BY GENDER WOMEN 1,170

MEN 1,904

Datalogic Highlights 2019 27 DATALOGIC HIGHLIGHTS 2019

EBITDA (MLN EUROS)*

100

40 105.5 16.7% 95.0 15.5% 103.3 17.0% 90.4 15.7%

20 73.7 13.8%

0 2015 2016 2017 2018 2019

* % on revenues

NET INCOME (MLN EUROS)*

62.2 9.9% 60.1 9.9% 30

20 50.3 8.2% 45.8 8.0% 40.5 7.6% 10

0 2015 2016 2017 2018 2019

* % on revenues

28 Datalogic Highlights 2019 NET TRADE WORKING CAPITAL DIVIDEND PER SHARE (MLN EUROS)* (DPS - EUROS)

75 0.5

60 0.4 0.50 0.50

45 0.3

30 75.1 12.3% 0.2 0.30 0.30 69.1 11.0% 0.25 61.5 10.1%

15 53.2 9.2 % 0.1

0 36.5 6.8% 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

* % on revenues

NET FINANCIAL POSITION EARNINGS PER SHARE (MLN EUROS) (EPS - EUROS)

30 1.75

20 1.5 30.1 10 23.8 1.25

0 13.4 1.0 -20 3.5 -21.0 0.75 1.07

-40 1.03

0.5 0.87

-60 0.79 0.70 -80 0.25

-100 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Datalogic Highlights 2019 29 DATALOGIC HIGHLIGHTS 2019

INCOME STATEMENT

(MLN EUROS) 2015 2016 2017 2018 2019

REVENUES 535.1 576.5 606.0 631.0 612.5

EBITDA 73.7 90.4 103.3 105.5 95.0

% on revenues 13.8 15.7 17.0 16.7 15.5 i

s s i EBT 51.6 66.9 75.4 77.8 62.2 F

i l a i % on revenues 9.6 11.6 12.5 12.3 10.2 r t s u NET INCOME 40.5 45.8 60.1 62.2 50.3 d n I % on revenues 7.6 8.0 9.9 9.9 8.2 r e n n EMPLOYEES GROWTH 2,567 2,696 2,912 3,157 3,074 a c S DIVIDEND PER SHARE 0.25 0.30 0.50 0.50 0.30 (EUROS) DIVIDEND DISTRIBUTION 10.5 14.5 17.4 28.9 28.7 (MLN EUROS)

30 Datalogic Highlights 2019 BALANCE SHEET

(MLN EUROS) 2015 2016 2017 2018 2019

FIXED ASSETS 363.8 371.7 347.9 369.7 391.1

CURRENT ASSETS 166.8 192.0 203.9 228.1 230.5

CURRENT LIABILITIES -162.7 -182.2 -181.9 -195.2 -184.2

NET WORKING CAPITAL 4.1 9.8 22.0 32.9 46.2

NET INVESTED CAPITAL 319.2 332.9 322.9 352.0 390.8

EQUITY 298.3 336.4 353.0 375.8 404.2

NET FINANCIAL POSITION -21.0 3.5 30.1 23.8 13.4

CAPEX 22.0 16.5 13.9 28.9 38.0

% on revenues 4.1 2.9 2.3 4.6 6.2

NET TRADE WORKING 36.5 53.2 61.5 69.1 75.1 CAPITAL

% on revenues 6.8 9.2 10.1 11.0 12.3

ROE % 15.0 14.4 17.4 17.1 12.9

DEBT/EQUITY % 7.0 -1.0 -8.5 -6.3 -3.3

Datalogic Highlights 2019 31 Datalogic Headquarters Via Candini, 2 40012 Lippo di Calderara di Reno (BO) - Italy Tel. +39 051 3147011 Fax +39 051 3147205 www.datalogic.com